sly: [12] Etymologically, sly means ‘a(chǎn)ble to hit’. It was borrowed from Old Norse sl?gr ‘clever, cunning’, which went back ultimately to the prehistoric Germanic base *slakh-, *slag-, *slōg- ‘hit’ (source also of English slaughter, slay, etc). The word’s original approbatory connotations of ‘cleverness’ or ‘skill’ survived into the 20th century in northern dialects, but elsewhere they were soon ousted by the notion of ‘underhandedness’. More neutral associations linger on in sleight ‘dexterity’ [13] (as in ‘sleight of hand’), which was acquired from an Old Norse derivative of sl?gr. => slaughter, slay, sleight
sly (adj.)
c. 1200, "skillful, clever, dexterous," from Old Norse sloegr "cunning, crafty, sly," from Proto-Germanic *slogis (cognates: Low German slu "cunning, sly," German schlau), probably from base *slak- "to strike, hit" (see slay (v.)), with an original notion of "able to hit." Compare German verschlagen "cunning, crafty, sly," schlagfertig "quick-witted," literally "strike-ready," from schlagen "to strike." A non-pejorative use of the word lingered in northern English dialect until 20c. On the sly "in secret" is recorded from 1812. Sly-boots "a seeming Silly, but subtil Fellow" is in the 1700 "Dictionary of the Canting Crew."